Investors are hoping companies' first-quarter profits will give them justification for pushing stocks to all-time highs this year.

The much-anticipated first-quarter earnings season unofficially kicked off late Monday when aluminum maker Alcoa reported better-than-expected profit. But while stocks have soared nearly 10% in the first quarter, analysts currently forecast earnings to rise only 0.7%, says S&P Capital IQ, the lowest reading in years.

While that's a big disconnection, the hope is that expectations for profits are so tepid that companies will have an easy time surpassing them and give investors reason for being so bullish. "Companies have set very low expectations," says Jack Ablin of BMO Private Bank. "That's setting us up for some positive surprises."

Some key areas of the quarter's earnings announcement of top interest to investors, include:

• The decoupling of earnings growth and stock prices. While stocks have been soaring, analysts have been seriously slashing their expectations for earnings. While analysts are calling for 0.7% earnings growth now, they were calling for 3.7% growth at the start of the year. "We just had a terrific first quarter (for stock prices)," says Andy Brooks, trader at T. Rowe Price. "Everyone is looking for a reason to say this isn't sustainable."

• Separation of winners from losers. The strongest earnings growth is expected from the telecom sector, with analysts calling for 9.4% growth there. That's followed by 7.3% growth called for in the consumer discretionary sector. Even so, four of the 10 sectors are expected to contract, with industrial companies and energy posted to be down the most, by 1.8% and 1.6%. Technology, too, is expected to post 1.4% lower profit.

• Companies are finding ways to drive business. While earnings are expected to rise less than 1%, revenue is expected to be up by 4%. This shows that companies are finding ways to increase business, which is critical as cost-cutting moves are largely played out.

But while investors are hopeful companies have simply set the bar low, making it easier to beat, others fear stocks have gotten ahead of reality. If companies don't handily beat earnings expectations, that could be a big factor in sparking a rash of selling by investors, says Karl Mills of Jurika Mills and Keifer. "The market is not priced for bad news," he says.